Welcome to cyberspace! This case presents the Court with the increasingly important issue of whether and how federal and state trademark laws apply to govern names selected by users for their Internet website. As the Internet grows in prominence as a venue for business, the courts will be called upon to apply traditional legal principles to new avenues of commerce. This is such a case.

Intermatic and Toeppen have filed cross-motions for summary judgment on all seven counts. The Court held extensive oral argument on August 29, 1996 and has reviewed the briefs, stipulations, affidavits and exhibits submitted by the parties. For the reasons set forth below, the Court recommends that Intermatic's motion for summary judgment be granted as to counts III and IV (the "Dilution counts") and be denied as to the remaining counts. The Court recommends that Toeppen's motion be denied as to all counts.

I. BACKGROUND FACTS

A. The Parties.

Intermatic is a Delaware corporation having a place of business in Spring Grove, Illinois. Intermatic has been doing business under the name INTERMATIC since 1941. Intermatic has 37 offices throughout the United States and has been in business in Illinois since 1892. Intermatic is a manufacturer and distributor of a wide variety of electrical and electronic products, including computerized and programmable timers and other devices which are sold under the name and trademark INTERMATIC.

Intermatic's sales and advertising of INTERMATIC labeled products have been continuous since the 1940's. (SF P 6).
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In the last 8 years, its sales in the U.S. have exceeded $ 850 million. Id. Intermatic's products prominently bear the INTERMATIC name and trademark, and well over 100 million units have been installed in homes and businesses throughout the United States. (SF PP 6, 9).

Advertising and promotional expenditures for products bearing the INTERMATIC mark for the last 8 years have exceeded $ 16 million. (SF P 7). Intermatic's co-op advertising consists of approximately 700 print ads per year, with each displaying the INTERMATIC mark. Intermatic also advertises and promotes its INTERMATIC products, mark and name by way of trade shows throughout the United States, magazines, point-of-purchase displays, brochures, radio, and television. (12 M PP 12, 31, 32).

Defendant Toeppen resides in Champaign, Illinois, where he operates an Internet service provider business known as Net66. Toeppen has registered approximately 240 Internet domain names without seeking the permission from any entity that has previously used the names he registered, because he contends that no permission was or is necessary. Among the domain names which he has registered are the following well known business names:
deltaairlines.com greatamerica.com
britishairways.com neiman-marcus.com
crateandbarrel.com northwest airlines.com
ramadainn.com ussteel.com
eddiebauer.com unionpacific.com

One of Toeppen's business objectives is to profit by the resale or licensing of these domain names, presumably to the entities who conduct business under these names.

B. Intermatic's Trademarks.

Intermatic owns five incontestable trademark registrations issued by the U.S. Patent and Trademark Office for its INTERMATIC mark. (SF P 4, Ex. 2). Intermatic is the exclusive owner of the INTERMATIC trademark and trade name, and there are no known third party uses of INTERMATIC in the U.S. (SF PP 4, 11, Ex. 2). Prior to registering the intermatic.com domain name, Toeppen had never used the term intermatic for any purpose.

C. The Internet.

1. Domain Names.

The Internet is a vast and expanding network of computers and other devices linked together by various telecommunications media, enabling all the computers and other devices on the Internet to exchange and share data.

The Internet provides information about a myriad of corporations and products, as well as educational, research and entertainment information and services. An estimated 30 million people worldwide use the Internet with 100 million predicted to be on the "net" in a matter of years.
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A computer or device that is attached to the Internet is often referred to as a "host." In order to facilitate communications between hosts, each host has a numerical IP (Internet protocol) address.
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The IP address is comprised of four groups of numbers separated by decimals. For example, the IP address of one of Toeppen's host computers is 206.139.80.66. Each host also has a unique "fully qualified domain name." The "fully qualified domain name" may not be repeated in the Internet. In the case of 206.139.80.66, the "fully qualified domain name" is "winslow.net66.com".

Domain name service is accomplished as follows: The Internet is divided into several "top level" domains. For example, "edu" is a domain reserved for educational institutions, "gov" is a domain reserved for government entities and "net" is reserved to networks. Although "com" is short for "commercial," it is a catchall domain and the only one generally available to Internet users that have no special attributes i.e., they are not a school or a government office or a network. Each domain name active in a given top-level domain is registered with the top level server which contains certain hostname and IP address information.

In order to access the Internet, most users rely on programs called "web browsers." Commercially available web browsers include such well-known programs as Netscape and Mosaic. If an Internet user desires to establish a connection with a web page hosted at winslow.net66.com, the Internet user might enter into a web browser program the URL "http: www.net66.com." (URL stands for uniform resource locator.) The first element of the URL is a transfer protocol (most commonly, "http" -- standing for hypertext transfer protocol). The remaining elements of this URL (in this case, "www" -- standing for World Wide Web -- and "net66.com") are an alias for the fully qualified domain name of the host winslow.net66.com. Once a URL is entered into the browser, the corresponding IP address is looked up in a process facilitated by a "top-level server." In other words, all queries for addresses are routed to certain computers, the so-called "top level servers". The top level server matches the domain name to an IP address of a domain name server capable of directing the inquiry to the computer hosting the web page. Thus, domain name service ultimately matches an alphanumeric name such as www.net66.com with its numeric IP address 206.139.80.66.

2. Registration of Domain Names.

Domain names using the suffix ".com" are established by registration with an organization called Network Solutions, Inc. ("NSI"). Registration of the other available top-level domain names, "edu," "gov" and "net", is handled by other organizations. With some limitations, NSI will register any combination of up to 24 alphanumeric characters as a domain name on a first-come, first-served basis to anyone who has access to at least two domain name servers. A domain name server is a host computer with software capable of responding to domain name inquiries and accessible on a full-time basis to other computers on the Internet. Registering a domain name is the step that allows the top-level servers within the Internet to know where the domain name servers or hosts associated with those domain names are located in the Internet. The cost for a domain name registration is currently $ 100. Domain name service can be operated by the domain name holder or obtained from any entity with the proper computer equipment, including hundreds of Internet service providers.

3. Web Pages.

One way to establish a presence on the Internet is by placing a web page, which is, ultimately, a computer data file on a host operating a web server within a given domain name. When the web server receives an inquiry from the Internet, it returns the web page data in the file to the computer making the inquiry. The web page may comprise a single line or multiple pages of information and may include any message, name, word, sound or picture, or combination of such elements. Most web browsers will show somewhere on the screen the domain name of the web page being shown and will automatically include the domain name in any printout of the web page. There is no technical connection or relationship between a domain name and the contents of the corresponding web page.

A hyperlink is a link from one site on the Internet to a second site on the Internet. "Clicking" on a designated space on the initial page which references the subsequent site by a picture, by some highlighted text or by some other indication will take a person viewing the initial web page to a second page. In addition to their use in indexes, hyperlinks are commonly placed on existing web pages, thus allowing Internet users to move from web page to web page at the click of a button, without having to type in URLs.

Hyperlinks can be and commonly are established without reference to the domain name of the second site. A hyperlink for the Champaign-Urbana map page might be a picture of a map or a statement such as "a map of Champaign-Urbana" or, more simply, "Champaign-Urbana." A hyperlink is not technically related to a domain name and therefore it can be identical to an existing domain name without conflicting with that domain name. For example, were Intermatic to establish an Intermatic home page at http: www.xyz.com, any number of indexes could be employed and hyperlinks could be established to bring up the page through use of the word INTERMATIC.

D. The Dispute.

In December of 1995, Toeppen applied for registration of the domain name http: www.intermatic.com ("intermatic.com") and NSI registered the domain name to Toeppen's domain name servers. A given domain name, the exact alphanumeric combination in the same network and using the same suffix, can only be registered to one entity. Intermatic subsequently attempted to register the same domain name and was prevented from registering "intermatic.com" as its domain name because of Toeppen's prior registration of that domain name.

Intermatic also became aware that Toeppen was using the mark "Intermatic" in connection with the sale of a computer software program. Upon discovery of Toeppen's prior registration and use of the Intermatic mark, Intermatic made a written demand on Toeppen that he relinquish or assign the "intermatic.com" domain name registration and discontinue use of the Intermatic mark. Toeppen agreed to discontinue using the Intermatic mark for his software product but refused to give up the "intermatic.com" domain name registration. In response to a formal request by Intermatic, NSI put Toeppen's registration on hold in April of 1996.

As long as Mr. Toeppen is allowed to retain the "intermatic.com" registration, Intermatic will be unable to acquire "intermatic.com" as an Internet domain name or use "intermatic.com" as an e-mail address on the Internet. However, Intermatic is technically capable of establishing its web page at another domain name, including, for example, "intermatic-inc.com" and it is technically capable of establishing at any available domain name a web page featuring the INTERMATIC mark and any other Internet-related marketing or business information. To date, Intermatic has not chosen to reserve any other domain name or to take any other action to establish a presence on the Internet. However, some of its distributors have placed Intermatic information on the Internet.

Until NSI placed the intermatic.com domain name on hold, Toeppen maintained intermatic.com as an active domain name on the Internet. Although he initially set up a web page regarding a software program he was developing and intended to call "Intermatic," Toeppen removed that page (which was available for less than a week) and dropped the proposed name for his software in response to demand from Intermatic. No software programs were ever sold. He then instituted as a web page a map of Champaign-Urbana, the community where Toeppen resides.

At no time did Toeppen use intermatic.com in connection with the sale of any available goods or services. At no time has Toeppen advertised the intermatic.com domain name in association with any goods or services. Presently, the intermatic.com domain name is not available for use by any party. Toeppen did not seek permission from Intermatic to use the intermatic.com domain name because he believes that no permission was or is necessary. Intermatic disagrees. This litigation ensued.

II. SUMMARY JUDGMENT STANDARD

Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Celotex Corporation v. Catrett, 477 U.S. 317, 327, 106 S. Ct. 2548, 2555, 91 L. Ed. 2d 265 (1986).

When reviewing the record on summary judgment, the court must draw all reasonable inferences in the light most favorable to the nonmovant. Hill v. Burrell Communications Group, Inc., 67 F.3d 665, 667 (7th Cir. 1995). To avert summary judgment, however, plaintiff "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538, (1986). A dispute about a material fact is genuine only if the evidence presented is such that a reasonable jury could return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). A summary judgment proceeding is not a vehicle for the resolution of factual disputes; it is designed to determine whether there is any material dispute of fact that requires a trial Id. If no reasonable jury could find for the party opposing the motion, it must be granted. Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir. 1995). The fact that the parties have filed cross-motions for summary judgment does not necessarily mean that summary judgment must be entered for one side. Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir. 1983) ("... filing of cross-motions does not automatically empower district court to dispense with assessment of whether material fact questions exist.").

III. LEGAL DISCUSSION

This case involves a dispute over the ownership of a highly prized Internet address. The issue is whether the owner of the Intermatic trademark may preclude the use of the trademark as an Internet domain name by defendant Toeppen, who had made no prior use of the Intermatic name prior to registering it as an Internet domain name. This case does not involve competing claims to the same name by parties who have actively used the same name in their business, such as the use of the term "United" by United Airlines, United Van Lines, United Mineworkers Union and the United Way.

The practical effect of Toeppen's conduct is to enjoin Intermatic from using its trademark as its domain name on the Internet. Unlike the typical trademark dispute, where both parties are using the name simultaneously and arguing whether confusion exists, the current configuration of the Internet allows only one party to use the "intermatic.com" domain name. Because the Internet assigns the top-level domain name .com to commercial and non-commercial users, ...

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